Strategic Management | Report 1

Running head: STRATEGIC MANAGEMENT
Strategic Management
Name of the Student
Name of the University
Author note

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Executive Summary
The report has thrown light on analyzing the different kinds of strategic analysis of
Woolworths Company in the complex business environment. Woolworths is one of the
Australian supermarkets which is one of the most successful retailers in comparison to the
other retailers in the market. With the assistance of the PESTEL, Porter’s Five Forces Model
analysis and Value Chain Analysis, it can be seen that there are different kinds of external
and internal opportunities and threats which can affect the growth of the company in the
future. Through the recommendations, there has been introduction of the recommendation for
and against the strategy which helped in understanding the status of the company in the
competitive market. Lastly, the most appropriate PESTEL analysis elements include the
economic and socio-cultural aspects which has been able to provide the audiences with the
idea relating to the customers tastes and preferences that has affected the growth of company
in the future in contrast to the other competitors.

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Table of Contents
Executive Summary...................................................................................................................1
1. Introduction............................................................................................................................3
2. Evaluating the organization’s environment...........................................................................3
a. External Analysis...............................................................................................................3
b. Internal Analysis................................................................................................................5
3. Analysis of competitive advantage........................................................................................6
a. Discuss competitive rivalry................................................................................................6
4. Strategy formulation and choice............................................................................................7
a. Vision.................................................................................................................................7
b. Goals..................................................................................................................................7
c. Initiatives – cost leadership vs differentiation....................................................................8
5. Recommendations and conclusions.......................................................................................9
a. With rationale for support of strategy................................................................................9
b. With rationale for critique of strategy..............................................................................10
References................................................................................................................................11

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1. Introduction
Woolworths Group is one of the Australian supermarkets which is basically owned by
the Woolworths Group and the company was incorporated in the year 1924. It is
headquartered at New South Wales, Australia and the employees who are working with
Woolworths Group till the year 2018 is 115000 (Woolworthsgroup.com.au, 2019). In
addition, it can be seen that there has been huge increase in the revenue which has been
earned by the company is A$56.726 billion till 2018. Moreover, the retailer is famous for
selling the different kinds of newspaper, groceries along with baby and home care products.
Furthermore, mission of the organization is to satisfy the various demands of the customers
through delivering the customers with proper quality-based products and services
(Woolworthsgroup.com.au, 2019).
2. Evaluating the organization’s environment
a. External Analysis
Porter’s Five Forces Model Analysis
Threat of Substitutes- It is high in case of Woolworths as it faces huge indirect kind
of competitors such as from indirect competitors such as convenience stores, specialist
grocery stores along with other small grocery stores (Zhao et al., 2016). From the different
evidences, it can be suggested that indirect competitors are the different viable substitutes to
the company Woolworths and it can pose serious type of threats in future.
Rivalry Among Existing Competitors- It is high as there are huge numbers of strong
players in the market and there is no such differentiation available due to the generic nature
of the products and services which are being delivered (Uhl & Gollenia, 2016). Therefore, in
such scenario, the competition is based on price and the major competitors of Woolworths

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which will be affecting the overall effectiveness in future includes Costco and it poses
dangerous threat for the future market.
Bargaining Power of Buyers- It is low as in the respective scenario, it can be seen
that there will be increase in the number of buyers present in the market and it will be
allowing customers to choose the best alternative which will be meeting their needs
(Todorović et al., 2015). Due to the same, it creates enormous pressure on Woolworths for
making the different products available at lower prices.
Threat of New Entrants- It is low in nature as it can be noticed that there are a
smaller number of substitutes in the market and due to the same, the situation will remain
unchanged in the near future (Takata, 2016). There are few substitutes available in the
market; however, these cannot match the preferences and products which are being sold by
Woolworths.
Bargaining Power of Suppliers-It is low in nature as Coles as well as Woolworths are
occupying more than eight percentage of the share in the entire market of the retail stores and
it can be considered from the same that it has been successful in creating huge positive
impact on the customers in the market positively (Rothaermel, 2013).
PESTEL Analysis
Socio-Cultural Factors- It is one of the major factors in the PESTEL analysis
wherein the main aspect which is dealt in the aspect is related to the consciousness of the
customers regarding the different healthy products. The other social trend is that there are
timing problems along the different working individuals, in such scenario, Woolworths try to
offer them with the different products and services with the different goods and services
within the specified time limit (Rosemann & vom Brocke, 2015).

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Economic Factors- Due to the current economic kind of climate, it can be seen that it
has resulted in the lower level of spending, hence in such scenario, the different customers in
the market are switching themselves to private label brands for savings and it has enhanced
the effectiveness (Noe et al., 2017). Moreover, the different supermarkets such as
Woolworths have been able to increase the private label offerings and it has been successful
in enabling in competing on basis of price through realizing high margins successfully.
b. Internal Analysis
Core Competencies
The main motive of Woolworths is lowering costs of the different kinds of products as
well as improved kind of services which are being provided to the customers which has been
able to become the reason for the enormous success for the company in a positive manner
(Mathooko & Ogutu, 2015). With inclusion of customer-centric aspect, Woolworths has been
successful in gaining competitiveness. In addition, there are different other aspects such as
home related décor has been able to create a wide base of customers.
Value Chain Analysis
Operations- It includes proper quality assessment in which standardized processes are
being used for detecting the defective products (Lasserre, 2017).
Sales and Marketing- It includes the different in-store promotions along with
dynamics in the different organization related objectives and it proves to be effective for
adopting to the different changes for competing (Langley & Abdallah, 2015).
Inbound Logistics- Woolworths tries to control distribution network which are related
to the different products and these are the major aspects that help in contributing towards the
firm.

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3. Analysis of competitive advantage
a. Discuss competitive rivalry
In the Australian retail sector, it can be seen that there is highly competitive rivalry in
the market that can influence the brand image of Woolworths negatively. There are various
competitors present in the market which includes Costco as well as Coles that are involved in
the retail business strongly and due to the same; it can be ineffective for the growth prospects
of the company (Harding, 2017). In addition, as analyzed from the different reports, it can be
seen that there are different kinds of issues which includes penetration of the DIY retail
related business that has influenced the business negatively.
In addition, the different retailers such as Coles and Costco are able to gain a strong
market share in the competitive economy wherein they are being able to provide the
customers with the similar kinds of products and services as delivered by Woolworths at a
lower rate and due to the same, it has reduced the effectiveness of Woolworths (Ginter,
Duncan & Swayne, 2018). However, on the contrary, it has been noticed that Woolworths

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have been successful in the market as they have introduced the different aspects such as self-
check out system which has enhanced the effectiveness of the company in comparison to the
other competitors and it has made them competitive in approach.
4. Strategy formulation and choice
a. Vision
The main vision of Woolworths is to provide with various products and services to the
different customers present in the market at a reasonable rate that will be enhancing the
growth of the company in the future (Geissdoerfer, Bocken & Hultink, 2016). The major
vision related aspect of Woolworths is to become the world’s most responsible kind of
retailer that will be suitable for handling the different activities to meet the effectiveness and
it will be reflecting on passionate commitment towards doing good business for the people,
customers as well as planet.
b. Goals
The most appropriate strategic goal of the company is to keep the different customers
of Woolworths as the topmost priority. In order to identify the different kinds of purposes, it
can be seen that Woolworths focuses on building the strong base of customers which will be
suitable for them in making the company as the customer-centric aspect which will be helpful
for the company in an appropriate manner. The main motto of the company is to diversify
and prioritize the different needs of the organization that will be enhancing growth of
company positively (David & David, 2013). In the future prospects, Woolworths need to
focus and concentrate on the different drinks business that will be suitable in expanding the
business-related activities along with incorporating the other variants under one single roof.

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On contrary, it can be seen that Woolworths is facing huge level of competition in the
market due to which it is affecting the entire profitability negatively. As to improve the
position in market, Woolworths require introducing the different innovative products along
with services such as introduction organic food items which will be provided to the customers
at a lower rate and maintaining high quality (David & David, 2013). There can be inclusion
of efficacy and transparency in the different services and it will let them to deal with the
customers suitably and it will be suitable for generating excellence in the market. While
differentiating the products and services in the competitive environment, there can be
inclusion of transparency in the services which are delivered by them and it enhances their
excellence towards the different systems which are being incorporated by them successfully.
c. Initiatives – cost leadership vs differentiation
After the analysis of the various researches, it can be identified that Woolworths
Supermarket will be able to integrate the various supply of goods and services with vertical
approach. With the inclusion of differentiation aspect, Woolworths have been successful in
gaining competitiveness in market and through incorporation of differentiation; Woolworths
have been able to provide the customers with high quality products, however at the increased
price. With incorporating differentiation, it will be suitable for Woolworths to generate
quality products for customers and satisfy their demands in the market (David & David,
2013).
On contrary, the approach related to cost-leadership is playing a vital and dominant
role in Woolworths as they are dedicated in generating various kinds of customers with
exceptional quality products and services at less price in contrast to other competitors. In
addition, Woolworths can include the cost-leadership aspect that will help them in improving
their position in market and maintaining transparency while selling of different products and

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services in the market suitably. Through the cost-leadership approach, Woolworths
successfully wants to pursue and become the lean type of retailer by generation of proper
excellence in the different activities which are being performed by them and it will be
enhancing the experience of customers (David & David, 2013).
5. Recommendations and conclusions
After the overall analysis of the strategies which have been incorporated by
Woolworths, there are different recommendations which can be incorporated by Woolworths
for and against the strategy which will be suitable for enhancing the growth of the company
in competitive business environment and it will be suitable for delivering the different aspects
in the market positively.
a. With rationale for support of strategy
While managing the respective aspect for support regarding the strategy, it can
be recommended that Woolworths requires to offer the various goods and services to the
different customers in the market at lowest possible pricing aspects which will be generating
profitability for the company and it will be meeting the demands of the customers in a
successful manner. Moreover, according to me, the Woolworths Company’s management
requires to employ various types of strategies which can be suitable for reduction of the costs
related to operations. Additionally, the respective company can include the approach related
to cost-leadership for being ahead of the other competitors present in the market. There can
be introduction of just-in-time approach which will be suitable for improvement in the
different activities related to supply chain processes.
Woolworths require to frame various strategic kind of incentives that are consistent in
contrast to the different political related circumstances of the Australian economy and it will
be suitable for the company for avoiding different loopholes. There can be introduction of the

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other recommendation which can be opined by me is that the respective company needs to
develop the proper strategic alliance within different operations through the implementation
of the rewards programs and other aspects that will be suitable for generating revenues and
profitability and it will be suitable for the company to earn revenues in a successful manner
as well.
b. With rationale for critique of strategy
On the contrary, there is critique of the respective strategy which can be
recommended and discussed as follows:
In the present era of complex business environment, Woolworths is facing huge level
of the challenges in market wherein the preferences of the customers are changing on a day to
day basis and the people are willing to pay the extra amount for the high-quality products and
services. In such scenario, I feel that the company needs to increase strategy which is relation
to pricing for managing different objectives and the individuals are considered to be the asset
of company.
Furthermore, from the analysis, it can be inferred that Woolworths requires
implementing the different kinds of strategies and initiatives that will be suitable for the
overall growth of the company. There can be introduction of the cost-leadership approach
that will be catering various needs of customers and it will be suitable for growth or company
positively.

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References
David, F. R., & David, F. R. (2013). Strategic management: Concepts and cases: A
competitive advantage approach. Pearson.
Geissdoerfer, M., Bocken, N. M., & Hultink, E. J. (2016). Design thinking to enhance the
sustainable business modelling process–A workshop based on a value mapping
process. Journal of Cleaner Production, 135, 1218-1232.
Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). The strategic management of health
care organizations. John Wiley & Sons.
Harding, S. (2017). MBA management models. Routledge.
Langley, A., & Abdallah, C. (2015). Templates and turns in qualitative studies of strategy and
management. In Research methods for strategic management (pp. 155-184).
Routledge.
Lasserre, P. (2017). Global strategic management. Macmillan International Higher
Education.
Mathooko, F. M., & Ogutu, M. (2015). Porter’s five competitive forces framework and other
factors that influence the choice of response strategies adopted by public universities
in Kenya. International Journal of Educational Management, 29(3), 334-354.
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill
Education.

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Rosemann, M., & vom Brocke, J. (2015). The six core elements of business process
management. In Handbook on business process management 1 (pp. 105-122).
Springer, Berlin, Heidelberg.
Rothaermel, F. T. (2013). Strategic management: concepts. New York, NY: McGraw-Hill
Irwin.
Takata, H. (2016). Effects of industry forces, market orientation, and marketing capabilities
on business performance: An empirical analysis of Japanese manufacturers from 2009
to 2011. Journal of Business Research, 69(12), 5611-5619.
Todorović, M. L., Petrović, D. Č., Mihić, M. M., Obradović, V. L., & Bushuyev, S. D.
(2015). Project success analysis framework: A knowledge-based approach in project
management. International Journal of Project Management, 33(4), 772-783.
Uhl, A., & Gollenia, L. A. (Eds.). (2016). A handbook of business transformation
management methodology. Routledge.
Woolworthsgroup.com.au (2019) Annual Reports of Woolworths (online) Retrieved from
https://www.woolworthsgroup.com.au/page/investors/ourperformance/reports/Reports
[Accessed on 12th August 2019]
Woolworthsgroup.com.au (2019) Woolworthsgroup (online) Retrieved from
https://www.woolworthsgroup.com.au/page/about-us/ [Accessed on 12th August
2019]
Zhao, Z. Y., Zuo, J., Wu, P. H., Yan, H., & Zillante, G. (2016). Competitiveness assessment
of the biomass power generation industry in China: A five forces model
study. Renewable Energy, 89, 144-153.

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